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Fix prices by government fiat by specifying a certain level of Medicare reimbursement (which also sets a benchmark for private insurers), and the reverse information flow is destroyed. Remove the ability to raise prices when demand exceeds supply and shortages will follow as sure as night follows day. Policies that keep prices too low for too long incentivize suppliers to exit the business. Consolidation follows, making the supply chain more prone to disruptions. And disruptions become more likely, as prices can’t rise to encourage survivors to invest in updating and maintaining their manufacturing systems.

If you want to see the future of our pharmaceutical industry operating under such a regime, look at some old photos of the South Bronx during the heyday of rent control.

There is no magic here. You don’t need a Ph.D. in economics to understand. Adam Smith explained it all back in 1776, the same year thirteen colonies embarked on a unique experiment in freedom coupled with responsibility.

That American experiment is not failing in the health care industry. Rather, it has been abandoned, with worse to come when, and if, Obamacare kicks in. Doctor shortages. Insurance shortages. And now drug shortages. This is the price we are paying as we continue to federalize one sixth of our national economy.